Question
QUESTION 14 A company purchases supplies on account, what is the effect on the accounting equation? Assets decrease; equity increases Assets decrease; equity decreases Liabilities
QUESTION 14
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A company purchases supplies on account, what is the effect on the accounting equation?
Assets decrease; equity increases
Assets decrease; equity decreases
Liabilities decrease; equity decreases
Liabilities increase; equity increases
Liabilities increase; assets increase
4 points
QUESTION 15
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Unearned revenues are:
Revenues that have been earned and received in cash
Revenues that have been earned but not yet collected in cash
Liabilities created when a customer pays in advance for products or services before the revenue is earned
Recorded as an asset in the accounting records
Increases to retained earnings
4 points
QUESTION 16
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A debit is:
An increase in an account
The right-hand side of a T-account
A decrease in an account
The left-hand side of a T-account
An increase to a liability account
4 points
QUESTION 17
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Acme Company had equity of $55,000 at the end of the current year. During the year the company had a $2,000 net loss and investments by owners in exchange for stock of $7,000. Compute equity as of the beginning of the year.
$5,000
$46,000
$50,000
$52,000
$64,000
4 points
QUESTION 18
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If Beginning Retained Earnings was $184,300, the company distributed $46,000 in dividends and Ending Retained Earnings was $345,000, what was the net income for the period?
$154,700
$206,700
$114,700
$575,300
$160,700
4 points
QUESTION 19
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In which of the following situations would the trial balance not balance?
A $1,000 collection of an account receivable was erroneously posted as a debit to Accounts Receivable and a credit to Cash
The purchase of office supplies on account for $3,250 was erroneously recorded in the journal as $2,350 debit to Office Supplies and credit to Accounts Payable
A $50 cash receipt for the performance of a service was not recorded at all
The purchase of office equipment for $1,200 was posted as a debit to Office Supplies and a credit to Cash for $1,200
The cash payment of a $750 account payable was posted as a debit to Accounts Payable and a debit to Cash for $750
4 points
QUESTION 20
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Which of the following is the appropriate journal entry if a company performs a service and is paid immediately?
Debit to Cash, Debit to Revenue
Debit to Cash, Credit to Revenue
Debit to Accounts Receivable, Credit to Cash
Debit to Revenue, Credit to Accounts Receivable
Debit to Accounts Receivable, Credit to Revenue
4 points
QUESTION 21
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Indicate whether a debit or credit entry would be made to record the following changes in each account. a. To decrease Cash. b. To increase Common Stock. c. To decrease Accounts Payable. d. To increase Salaries Expense. e. To decrease Supplies. f. To increase Revenue. g. To decrease Accounts Receivable. h. To increase Retained Earnings.
i. To increase unearned revenue j. To increase dividends
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10 points
QUESTION 22
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Using the trial balance below: complete the income statement, the statement of retained earnings and a balance sheet.
Johnny Dollar's Body Shop Trial Balance December 31, 2020 Cash 6500 Accounts receivable 475 Body shop supplies 2500 Office supples 600 Body shop equipment 35200 Accounts payable 1500 Common stock 10000 Retained earnings 11775 Dividends 36000 Revenue earned 95000 Body shop supplies expense 3425 Office supplies expense 775 Rent expense 6000 Utilities expense 4800 Wages expense 22000 118275 118275 -- Font family --Andale MonoArialArial BlackBook AntiquaComic Sans MSCourier NewGeorgiaHelveticaImpactSymbolTahomaTerminalTimes New RomanTrebuchet MSVerdanaWebdingsWingdings -- Font size --1 (8pt)2 (10pt)3 (12pt)4 (14pt)5 (18pt)6 (24pt)7 (36pt) -- Format --HeadingSub Heading 1Sub Heading 2ParagraphFormatted Code -- Font family -- -- Font size --
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